Link: GAO Opinion
Agency: Department of Housing and Urban Development
Disposition: Protest denied.
General Counsel P.C. Highlight:
GAO denied the protest of SAN Business Consultants LLP based on the Department of Housing and Urban Development’s (HUD) award of a contract to Integrated Financial Engineering, Inc. (IFE), under a request for proposals (RFP), for performing the annual actuarial study of the financial soundness of the Federal Housing Administration’s Mutual Mortgage Insurance Fund, single family forward loan program, and home equity conversion mortgage program.
The contract was issued for a contractor to “build the next generation actuarial study models” for both the single family forward loan and home equity conversion mortgage programs; produce an actuarial review regarding the financial soundness of the mortgage market for each program; and provide associated analyses that use the actuarial models to answer various policy questions. Award was to be made considering: technical approach; substantially similar experience; qualifications of key personnel and personnel management; demonstrated ability to effectively and efficiently manage the proposed contract; past performance; and price. Under the technical approach subfactor, the solicitation advised, “The Government will evaluate the extent to which the technical approach proposed demonstrates a full understanding of the requirements and viable methodologies and processes performing Actuarial Reviews. The Offeror shall provide a narrative describing [its] approach and understanding of services required in the SOW. The proposal shall demonstrate how the offeror is going to address all requirements specified in the SOW.”
SAN challenged the evaluation of its proposal under the technical approach subfactor. The agency found six deficiencies and a total of eight weaknesses. For example, the agency assigned a weakness to SAN’s proposal because it devoted more than four pages to discussing the advantages and disadvantages of possible programming languages to use in its computer model, but never proposed which it would use, instead leaving it for HUD to decide. Since SAN failed to adequately define its approach to the SOW requirements by specifying which programming language it would use, the agency reasonably assigned the proposal a weakness. In this regard, even if, as noted by the protester, the agency ultimately has input regarding the language used, it was SAN’s responsibility to propose a specific language in the first instance.
The agency assigned a deficiency to SAN’s proposal under the technical approach factor because it was concerned that SAN did not understand that it would be required to build its own model to use in conducting the actuarial review, but instead believed that it would have access to the model developed by the incumbent IFE during the prior procurement and would be able to refine and expand that model. SAN challenges the assigned deficiency on the basis that SAN did not misunderstand the solicitation requirements regarding the actuarial model; according to the protester, nothing in the solicitation indicated that offerors would have to build their own system from scratch. The evaluation was reasonable, concluded GAO. In its proposal, SAN stated its understanding that HUD “has developed a modeling system for projecting the operation of the FHA Mutual Mortgage Insurance Fund,” and the agency was “seeking a contractor to refine and expand the Model.” SAN further stated in its proposal that during the transition period, “information regarding the design and operation of the Model, as well as the preparation of the Actuarial Review, must be transferred from the current contractor to the new contractor.” The statements reasonably indicated to the agency that SAN believed it would have access to the incumbent model as well as information regarding the design and operation of that model and that it planned to approach the project by building on the incumbent model. Indeed, in its initial protest, SAN argued that it believed it would have access to the incumbent model, and indicated that its model would be an outgrowth of the existing model.